「Fed Whisperer」: Worried about runaway inflation, the Fed may pause rate cuts

BlockBeats News, May 6th: Ahead of the Federal Reserve's interest rate decision on Thursday, a well-known financial journalist nicknamed the "New Fedwire News Service," Nick Timiraos, published a new report analyzing the dilemma the Federal Reserve faces in responding to the Trump administration's "hasty" tariff policy, suggesting that the Fed may postpone interest rate cuts.

The article suggests that the Federal Reserve will closely monitor changes in the labor market and use employment data as a key reference for its decisions: "The Federal Reserve will not cut interest rates early because of the expected economic slowdown. They need to see actual data, especially in the labor market." Tariffs may force the Fed to take the "latter path." Because tariffs may temporarily raise prices, their uncertainty may also slow economic activity, leading to incipient stagflation, which could prompt the Fed to postpone rate cuts.

If inflation expectations spiral out of control, controlling inflation will become even more challenging. The article further points out that compared to five years ago, the "constraining factors" mentioned by former Fed Governor Brainard have worsened, as the economy has recently experienced a period of very high inflation. Even if the Fed internally considers rate cuts, it still needs to publicly maintain vigilance against inflation to stabilize market expectations.